Question 1

Which of these countries' growth rates of real GDP per person have exceeded the United States' growth rate of real GDP per person over the last century?

Accepted Answer

A)   Canada and China
B)   China and India
C)   Germany and India
D)   Germany and PakistanE) B) and C)
F) A) and D)

Question 2

Industrial machinery is an example of

Accepted Answer

A)   a factor of production that in the past was an output from the production process.
B)   physical capital.
C)   something that influences productivity.
D)   All of the above are correct.E) A) and C)
F) B) and C)

Question 3

Other things the same, an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

Accepted Answer

A) True 
 B)False

Question 4

Increases in both human capital per worker and physical capital per worker increase productivity.

Accepted Answer

A) True 
 B)False

Question 5

Industrial machinery is an example of

Accepted Answer

A)   a factor of production that in the past was an output from the production process.
B)   technological knowledge.
C)   a production function.
D)   an item which always has the property called constant returns to scale.E) B) and C)
F) A) and D)

Question 6

According to research by Robert Fogel, what proportion of the British population in 1780 was so malnourished that they could not perform manual labor?

Accepted Answer

A)   5 percent
B)   10 percent
C)   20 percent
D)   25 percentE) A) and B)
F) B) and D)

Question 7

Foreign saving is used for domestic investment when foreigners engage in

Accepted Answer

A)   foreign direct investment.
B)   foreign portfolio investment.
C)   either foreign direct investment or foreign portfolio investment.
D)   None of the above is correct.E) A) and B)
F) A) and D)

Question 8

Which of the following is not correct?

Accepted Answer

A)   Countries that have had higher output growth per person have typically done so without higher productivity growth.
B)   A country's standard of living and its productivity are closely related.
C)   Productivity refers to output produced per hour of work.
D)   Increases in productivity can be used to increase output or leisure.E) A) and D)
F) A) and C)

Question 9

List the four determinants of an economy's productivity.

Accepted Answer

The four determinants are phys...

Question 10

What is the difference between human capital and technology?

Accepted Answer

Technology is society's understanding of...

Question 11

Figure 25-1.
On the horizontal axis, K/L represents capital K)  per worker L) . On the vertical axis, Y/L represents output Y)  per worker L) . 
-Refer to Figure 25-1. The curve becomes flatter as the amount of capital per worker increases because of

Accepted Answer

A)   increasing returns to capital.
B)   increasing returns to labor.
C)   diminishing returns to capital.
D)   diminishing returns to labor.E) All of the above
F) B) and D)

Question 12

What is the distinction between foreign direct investment and foreign portfolio investment?

Accepted Answer

A capital investment that is owned and o...

Question 13

The behavior of market prices over time indicates that natural resources are

Accepted Answer

A)   a limit to economic growth.
B)   unrelated to economic growth.
C)   not a limit to economic growth.
D)   the major determinant of productivity.E) B) and D)
F) C) and D)

Question 14

Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N) .
-Refer to Scenario 25-1. K represents the quantity of

Accepted Answer

A)   human capital only.
B)   physical capital only.
C)   human capital and physical capital combined.
D)   nonrenewable natural resources.E) All of the above
F) A) and B)

Question 15

Country A and country B both increase their capital stock by one unit. Output in country A increases by 10 while output in country B increases by 8. Other things the same, diminishing returns implies that country A is

Accepted Answer

A)   richer than Country B. If Country A adds another unit of capital, output will increase by more than 10 units.
B)   richer than Country B. If Country A adds another unit of capital, output will increase by less than 10 units.
C)   poorer than Country B. If Country A adds another unit of capital, output will increase by more than 10 units.
D)   poorer than Country B. If Country A adds another unit of capital, output will increase by less than 10 units.E) B) and C)
F) None of the above

Question 16

Among the following countries, which one has the highest level of real GDP per person but the lowest growth rate of real GDP per person over a very long period of time?

Accepted Answer

A)   the United Kingdom
B)   Mexico
C)   Argentina
D)   ChinaE) A) and B)
F) A) and C)

Question 17

Although growth rates across countries vary some, rankings of countries by income remain pretty much the same over time.

Accepted Answer

A) True 
 B)False

Question 18

In a particular production process, if the quantities of all inputs used are increased by 60%, then the quantity of output increases by 60% as well. This means that

Accepted Answer

A)   the production process cannot be enhanced by technological advances.
B)   no mathematical representation of the relevant production function can be formulated.
C)   the relevant production function has the limits-to-growth property.
D)   the relevant production function has constant-returns-to-scale.E) None of the above
F) All of the above

Question 19

Country A has real GDP per person of 100,000 while country B has real GDP per person of 200,000. All else constant, country A will eventually have a higher standard of living than country B if

Accepted Answer

A)   the level of saving per person is 10,000 in country A and 10,000 in country B.
B)   the level of saving per person is 12,000 in country A and 15,000 in country B.
C)   Both of the above are correct.
D)   None of the above are correct.E) A) and B)
F) B) and C)

Question 20

Which of the following would increase productivity?

Accepted Answer

A)   an increase in the physical capital stock per worker
B)   an increase in human capital per worker
C)   an increase in natural resources per worker
D)   All of the above are correct.E) A) and B)
F) A) and C)

Exam 7: Production and Growth

Among the following countries, which one has the highest level of real GDP per person but the lowest growth rate of real GDP per person over a very long period of time?

Correct AnswerverifiedShow Answer

Although growth rates across countries vary some, rankings of countries by income remain pretty much the same over time.

Correct AnswerverifiedShow Answer

Industrial machinery is an example of

Correct AnswerverifiedShow Answer

Country A has real GDP per person of 100,000 while country B has real GDP per person of 200,000. All else constant, country A will eventually have a higher standard of living than country B if

Correct AnswerverifiedShow Answer

Increases in both human capital per worker and physical capital per worker increase productivity.

Correct AnswerverifiedShow Answer

Which of these countries' growth rates of real GDP per person have exceeded the United States' growth rate of real GDP per person over the last century?

Correct AnswerverifiedShow Answer

Industrial machinery is an example of

Correct AnswerverifiedShow Answer

Which of the following would increase productivity?

Correct AnswerverifiedShow Answer

In a particular production process, if the quantities of all inputs used are increased by 60%, then the quantity of output increases by 60% as well. This means that

Correct AnswerverifiedShow Answer

What is the distinction between foreign direct investment and foreign portfolio investment?

Correct AnswerverifiedA capital investment that is owned and o...View AnswerShow Answer

Foreign saving is used for domestic investment when foreigners engage in

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Country A and country B both increase their capital stock by one unit. Output in country A increases by 10 while output in country B increases by 8. Other things the same, diminishing returns implies that country A is

Correct AnswerverifiedShow Answer

List the four determinants of an economy's productivity.

Correct AnswerverifiedThe four determinants are phys...View AnswerShow Answer

Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N) . -Refer to Scenario 25-1. K represents the quantity of

Correct AnswerverifiedShow Answer

What is the difference between human capital and technology?

Correct AnswerverifiedTechnology is society's understanding of...View AnswerShow Answer

Figure 25-1. On the horizontal axis, K/L represents capital K) per worker L) . On the vertical axis, Y/L represents output Y) per worker L) . -Refer to Figure 25-1. The curve becomes flatter as the amount of capital per worker increases because of

Correct AnswerverifiedShow Answer

Other things the same, an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

Correct AnswerverifiedShow Answer

According to research by Robert Fogel, what proportion of the British population in 1780 was so malnourished that they could not perform manual labor?

Correct AnswerverifiedShow Answer

The behavior of market prices over time indicates that natural resources are

Correct AnswerverifiedShow Answer

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A capital investment that is owned and o...
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The four determinants are phys...
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Technology is society's understanding of...
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